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No Surpise: House passes amended $10 Mil LBJ bill

Tue, 04/10/2012 - 4:29pm

The House yesterday approved in third and final reading the amended version of the administration bill seeking $10 million for the LBJ Medical Center off-island medical referral program and the bill will be transmitted today to the Senate for consideration.

The Senate, which reconvenes today, following a three-day recess, has already rejected their version of the administration bill; and, it’s unclear how they will react to this amended version.

Olivia C. Reid-Gillet, president of G.H.C. Reid and Company Ltd, said yesterday that it’s “very disappointing that the 12 representatives who voted ‘yes’ in the House did not take the private sector's fact-based statements into serious consideration when deliberating, but I am extremely thankful to those representatives who truly listened to our very real concerns as our people are the ones who will be affected in the end.”

“We remain hopeful that the esteemed Senate's wisdom will be to vote against this bill once again as they did initially,” she said after learning about the House vote.

Prior to third reading, Rep. Pulele’iite L. Tufele Jr.—chairman of the House Health/LBJ Hospital Committee—called on his colleagues to approve this important measure to help the hospital, adding that the final decision on this legislation was not an easy one.

He acknowledged concerns regarding the funding source — referring to the hikes in excise taxes on beer, alcohol and tobacco; as well as the increase in business licenses.

In the final vote, 12 voted in support of the measure, including House Speaker Savali Talavou Ale who announced that he is casting a “yes” vote for his Alataua county. It’s rare that the Fono leaders cast votes on any bill presented for final vote.

Lawmakers who voted against the bill are Reps. Vailoata E. Amituana’i Jr., Taotasi Archie Soliai, and Tapumanaia Galu Satele Jr. Their main objection is that there is no guarantee the government will collect the projected revenues from the proposed hikes, and the increases will only end up being passed on to customers, who are already faced with a high cost of living.

After the vote was tallied and announced, Savali thanked the House membership for their final decision on this measure, which he said is necessary to support the hospital.

THE BILL’S REVENUES

Under the approved House amended version, the new 4% wage tax has been deleted altogether and the tax increases on beer and alcohol were reduced from the proposed 250% to 240%.

The tax on cigarettes/tobacco was also reduced — from 17.5 cents to 15 cents. (Samoa News reported last Saturday that it was 17.5 and 15 percent, however, those numbers refer to cents — not percentages).

The revenue collected from these specific increases on beer, alcohol, and cigarettes/ tobacco is to all go to the off-island medical referral program.

The House also reduced the business license fee hike.

For example, a beer tavern license is reduced from $350 to $100 and an alcohol beverage license from $535 to $100. The current law charges a business license “per table” for billiard and pool hall. The House deleted “per table” and reduced the fee from $175 — proposed by the administration— to $75.

However, according to the bill, 75% of the revenue collected from the business license fee is to be deposited into an account, earmarked for the off-island medical referral program; but it does not say what happens to the other 25% of the fee, nor does it say if the account is ‘specific’ for the off-island medical referral program.

Under the franchise tax, the House amended it, basing the tax on a corporation’s annual gross sales receipts and revenue. For example, corporations making $250,000 or less pay $200 while companies making $1 million and more pay $2,000. All revenues collected from this new tax go to the referral program.

Pulele’iite told House members last Thursday that the government will collect around $2.3 million annually under the proposed amendments. Under the initial language of the bill, the government estimated to collect close to $14 million annually, with the wage tax providing the highest amount of money.